Procter & Gamble stock may be trading at a discount to its intrinsic value following the planned US$3.8 billion acquisition of supplement maker Thorne. A discounted cash flow model estimates the company's intrinsic value at about US$201.56 per share, roughly 29 percent above the recent share price of US$143.12. The stock also screens as undervalued on a price-to-earnings basis, trading at 21.1 times earnings versus a tailored fair multiple of about 26 times. However, broader valuation checks are mixed, with Procter & Gamble passing only four of six tests, and the projected US$1 billion cost impact from the Iran conflict may weigh on future earnings.
Procter & Gamble CompanyDCF and P/E valuation suggest stock is undervalued, with intrinsic value 29% above current price.
Acquisition by P&G at $3.8 billion likely provides premium to shareholders.
